Pricing Response from the Recurly CEO
Thanks to everyone who has contributed feedback about our pricing. We have been researching our pricing strategy for several months in an effort to build a competitive and sustainable business. During the beta, we reached out to several customers about our new pricing. I strongly believe our new pricing is closely aligned to our value in helping you deploy subscriptions with minimal effort so you can focus on building a valuable service.
As an entrepreneur, I love the ideas of the lean startup movement. It is responsible for a new wave of startups that watch their cash flow carefully and are capable of explosive growth once they find the right product/market fit. Love it. However, it is important to remember that being a lean startup is not synonymous with being cheap. Being a lean startup means spending money where it counts.
I believe that our pricing should be very attractive as you build your business. Yes, you're paying more upfront (especially if you have no revenue today), just as you're already paying for your merchant account and payment gateway. At the same time, you're getting a guarantee that our prices are not going to increase as your revenue grows. You're likely paying the payment gateway and merchant account about $80-100/mo because they are necessary costs to collect revenue. Recurly can save you months of development time, offer you lots of flexibility around your pricing strategy, give you options with your payment gateways, and guarantee that we're not going to increase our fees when you become successful. That's a strong value proposition for just $99/mo (for most companies). Our pricing tops out at $199/mo -- previously it would scale up to $2,650/mo.
If your revenue stream today is less than $150/mo, I am sympathetic that you're losing money on your billing expenses (payment gateway, merchant account, billing system). It's tough being an entrepreneur. My advice would be to find out how you can create a valuable product before you implement the billing piece. Otherwise, you're losing time & money on a product that no one is using. Get some early adopters, find a good market fit for your product, and then you're primed to turn on subscriptions. Recurly started paying about $200/mo back in November 2009 because we have three different production payment gateways and a merchant account. Yesterday, we finally started charging. I could have saved my company $900 had I waited to acquire the production payment gateways until we were ready to charge. (Of course, our scenario is slightly different because we used these gateways to make sure our service worked for you. But the point is still the same.) I think it's a pretty common situation because it happened with my last startup as well.
Regarding our feature set, I would like to point out that we give you robust set of payment gateway flexibility. At any time, you can switch between payment gateways without any consequences. And, we do not require Authorize.NET's CIM (unlike one of our competitors) so we can save you an additional $20/mo. We also offer the best hosted payment page experience -- this feature is complete and there are some new features around this that will be documented this weekend. Recurly works wonderfully internationally since we have an understanding of the fraud controls required to maximize transaction acceptance rates internationally, support multiple gateways and currencies. Our developers are also hard at work at some very exciting new features.
Our new pricing model allows us to build a sustainable company and continue innovating with all the feature requests that are pouring in. We want to be your partner as you grow your business. That means that we need to position ourselves for the long term.
Speaking to our beta customers, I realize our pricing announcement may have been abrupt for some of you. We truly want to see you succeed. If your began integrating with Recurly before our pricing announcement, we are happy to extend your trial period up to 3 months while your revenue is below $5,000/mo. If at the end of the trial period, you still want to leave, we will return your subscription data to you so you can securely migrate to another solution. If you'd like to continue, please subscribe to a plan before April 24th and send us an email at firstname.lastname@example.org so we can increase your trial period.
Either way, we encourage you to send us your feedback privately or publicly. Please feel free to comment publicly -- we will not censor our blog. You may tweet to us @recurly. Or, email us at email@example.com if you'd like to leave private feedback and I promise to read your comments. I look forward to hearing from you.
Sincerely, Isaac Hall